On July 25, DISH Network Corporation (NASDAQ: DISH) struck a deal with Amazon.com, Inc. (NASDAQ: AMZN) to sell its 5G plan. This deal has major implications for the company since Amazon is the world’s largest online retailer and the exposure its plan will receive could boost its revenues in the coming quarters. With the company competing with Mint Mobile on Amazon, it has the potential to attract a portion of Mint’s users given the advantages it holds – propelling it to Amazon’s best-selling mobile plan. For these reasons, DISH stock could be one to watch this year to see the impact of this deal on its revenues.
DISH Stock News
In the meantime, Amazon boasts an extremely extensive user base in the US which accounts for 230 million people and a whopping 82% of US households have an Amazon Prime membership. The significance of this retail partnership lies in the fact that these people will be more readily exposed to DISH’s mobile plan which could increase sales substantially. Assuming that 10 million Amazon users – a fraction of its total users – purchase DISH’s plan, it would translate to $250 million in monthly revenues.
Mint Mobile Competition
It is worth mentioning that DISH will not be the only mobile network player in Amazon’s digital space. Currently, Amazon has a retail partnership with Mint Mobile, however, DISH’s unlimited plan has a couple of advantages over Mint’s unlimited plan that could help it attract new customers. The first advantage is a pricing advantage since Mint offers its unlimited plan for $30/month while DISH’s plan is worth $25/month. As is, 92% of US citizens are putting in effort to cut their spending due to inflation, which is why DISH’s cheaper unlimited plan could appeal to many consumers.
Another advantage DISH has lies in the difference between both plans’ high-speed internet quota. Mint’s plan reduces its internet speed from 5G to 2G after users exceed a 35 GB threshold. On the other hand, DISH reduces its internet speed from 5G to 3G after users exceed its 30GB threshold. This basically means that Mint users experience a more drastic drop in internet speed once they exceed their high-speed data threshold.
DISH’s final advantage lies in the fact that it uses AT&T, T-Mobile, and Verizon to support its network. That said, Mint’s 5G network only relies on T-Mobile which means that its 5G speed could fluctuate significantly due to network congestion since T-Mobile users would be given priority in case the network is congested. In this way, DISH users are less likely to witness a congested network which could be an attraction point for the company. In this way, DISH might overtake Mint as Amazon’s best-selling mobile plan in the coming months.
DISH Stock Financials
According to its Q1 2023 report, DISH’s assets increased QoQ from $52 billion to $53 billion, which is attributed to its cash balance increasing from $1.7 billion to $2.2 billion. This increase in cash is attributed to DISH issuing $1.5 billion worth of senior notes in Q1. On the other hand, DISH’s liabilities remained relatively unchanged at $34 billion.
In terms of revenue, DISH experienced a YoY decrease from $4.3 billion to $3.9 billion as a result of losing 500 thousand pay-TV subscribers due to cord-cutting. That said, despite the fact that expenses slightly decreased from $3.7 billion to $3.6 billion, net income decreased from $448.8 million to $243 million as a result of the aforementioned decrease in revenue.
Media Sentiment
@junkbondinvest is watching DISH’s insider activity closely
@YourBoyMilt is watching DISH stock closely following its deal with Amazon.
Technical Analysis
DISH stock is in a bullish trend and is trading in an upward channel. Looking at the indicators, the stock is above its 200, 50, and 21 MAs which is a bullish sign. Meanwhile, the RSI is neutral at 56 and the MACD is bearish.
As for the fundamentals, DISH recently executed a deal with Amazon to sell its 5G mobile plans on Amazon. Given the potential increase in revenues the company may see thanks to this deal, investors could wait for the stock to retest its strong support at $6.15 to take a long position ahead of the company’s Q3 earnings.
DISH Stock Forecast
Following its deal with Amazon, DISH’s revenues are poised to increase substantially starting Q3 given the exposure its plan will have. With this in mind, the company’s plan has the potential to overtake Mint’s plan as Amazon’s best-selling mobile plan thanks to its appeal due to its cheaper price and 5G coverage. For these reasons, DISH stock could be one to hold onto this year in anticipation of its expected revenue growth.
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